1. Field of the Invention
The present invention is in the field of e-commerce, and particularly as it pertains to virtual communities such as social networks, online gaming communities and “virtual worlds”, and to business-to-business (B2B) e-commerce and supply chain (also commonly known as eProcurement) technologies. Yet more particularly, the present invention pertains to linking of B2B eProcurement networks to virtual communities in order to allow businesses to receive all traditional e-procurement services while gaining unique sales channels and advertising opportunities by participating in Virtual Communities (VC's), and allowing VC's to receive highly targeted products (and advertising) for their members to promote, buy and sell.
2. Discussion of the State of the Art
In the field of entertainment media, several trends have emerged in recent years, quite separately, that when combined offer surprising new possibilities for individuals and enterprises alike. One of these trends is emergence of product placements as a new kind of advertisement. This now familiar technique involves advertisers (a vendor of products such as personal computers, cars, liquors and toys, just to name a few) paying content creators (movie studios, TV studios and others) to display or refer to their products in prominent ways within the content itself. This is in stark contrast to previous practices in advertising, where boundaries between advertising and entertainment content were clearly defined; with product placements, commercial messages can be included within content for which consumers pay to view, and with which consumers are strongly emotionally engaged.
A second trend is democratization of content creation. In the age of the great movie studios, control of content creation (at least in new media of radio and movies) was entirely within the hands of a few very powerful businessmen. Later, as costs of high quality production came down, and as more and more channels to market became available, first through UHF television stations and later through cable and satellite systems, content creation became more diffuse, taking place across thousands of companies acting in various capacities. But only recently has serious content routinely been created by individuals, by consumers. The emergence of “user-generated content” (UGC) has been a large part of the post-2000 boom in user-centric web services, which commonly is labeled broadly as Web 2.0. Today, with blogs, personal web pages, and sites for uploading of user-generated music and video clips, more and more of what people read, hear and watch is created outside of the corporate world, in the world of UGC.
Another important trend has been emergence of highly targeted advertising. Advertising once was a mass media affair, and segmentation tended to go no further than choosing during which radio or television show to advertise. Today, Internet portal companies, search engines, marketing database companies with access to credit card and other financial data all compete to precisely target advertisements to ever more finely sliced segments of consumer populations. The rapid rise of Google has also shown how much the advertising equation has changed; while charging only a tiny fraction of what traditional media charged for advertising, and while permitting only the most rudimentary text-based advertisements, Google has grabbed a significant share and built a highly profitable business because its ad placements are highly targeted and because advertisers only pay when ads are clicked.
Finally, the last few years have seen emergence of a variety of virtual communities, self-organizing groups of individuals, usually assembled online, that engage in new forms of social interaction. Among these is a new category of web-based entity, social networks. Already there are thousands of these, ranging from very large operators such as MySpace or Facebook to very small, highly verticalized players. There is even a company selling a platform for launching new social networks. And social networking has quickly become a major outlet for user-generated content (in fact, one can view each subscriber's profile page as a form of UGC).
As is typical in web trends, original social networking pioneers offered “something for nothing”, and most social networking sites continue to offer a wide range of free services. But soon after, people began seeking ways to develop profitable business models to monetize large numbers of loyal users that had been created in a very short time. Much as Google did in search, these pioneers are looking to advertising to satisfy the need to generate revenue from highly visited social networking sites, and they are typically adopting methods used by Google—allowing users to provide access to advertisers on their profile pages in return for a small slice of advertising revenue. This is by now a classical business model—site operators, user whose profile pages are used, media buyers and others all take pieces of the total advertising spend committed by advertisers (these by and large are the same kinds of companies as in all of the previous ages, plus new web-based companies).
One limitation of currently emerging models of allowing advertisers to place ads on profile pages is that it is a largely passive affair. A user can, for instance, subscribe to one of many affiliate advertising services and make a space available for ads to be displayed, but the user has no control over what ads are displayed. Advertisers will display ads that seem to correlate well with content of the page (for instance, a user's blog on “the new physics” will likely show ads from a science magazine, whereas one that focuses on a particular sports team would likely show ads promoting sports apparel or memorabilia. But the user cannot choose, and certainly the user cannot block undesirable advertisers from her page.
This limitation, besides providing for possibility of incongruous and occasionally counterproductive ad placements, also leads to an inability of mainstream advertisers to take advantage of a most powerful aspect of social networks—which is precisely that social networks are self-organized market segments. People who network together, whether in a broad “network of friends” sense or in a narrow “network of first edition enthusiasts” sense, automatically define segments of great interest to advertisers, as these social networks generally will share much in common, including buying habits. But since the essence of social networks is their self-organization and, accordingly, their dynamic nature, traditional advertising models fall short.
All problems cited above in social networks also occur in other forms of virtual communities, such as online gaming communities, “virtual worlds” in which whole economic systems are operated online and members engage in “alternate lives”.
What is clearly needed is a way to bring together the worlds of advertising and virtual communities in a way that serves the best interests of both key constituents—those who wish to advertise and those to whom advertisers are directed. Users and managers of virtual communities, should they be able to influence what, when and how is advertised to them, would be able to achieve the reasonable goal of having ads that addressed actual needs and preferences, and of to share in benefits thus created. And, in a continuation of the trend away from mass advertising that search-based ads illustrate, advertisers would be able to precisely target content at those social networks that are most predisposed to favorably react to the message, and to do so at a remarkably low cost, thus driving revenue per ad dollar up dramatically.
Furthermore, a parallel set of trends has developed in the area of business-to-business (B2B) e-commerce, including supply chain or eProcurement technologies. More and more businesses routinely procure the raw, processed and finished goods needed to satisfy the needs of their customers from business partners via electronic networks. Early progress in this direction took place through use of electronic data interchange (EDI), which allowed a limited number of typically very large enterprises to coordinate ordering and logistics of commodities and financial instruments. For example, manufacturers would use then-new technology of enterprise resource management software to coordinate purchase of raw materials in order to achieve dramatic productivity improvement through use of “just in time” and related management methodologies. With emergence of the Internet and the World Wide Web globally, the breadth and depth of activities performed using EDI expanded, and moved to the new massively interconnected world of the Web.
At the time of the invention, many B2B marketplaces have emerged in which communities of enterprises coordinate and compete with much greater speed and flexibility than was ever possible before. These changes have greatly improved resilience of the global market system, enabling it to withstand multiple shocks with surprisingly little disruption, since inventory levels are lower and more fluid and since disruptions are known and can be accommodated far more rapidly than before.
Unfortunately, these gains in B2B e-commerce have proceeded in relatively complete isolation from equally profound changes in how consumers communicate, and in particular from phenomena of virtual communities such as social networks. This is unfortunate, since virtual communities perform a natural and important function of filtering the vast complexity of human social interactions. In the past businesses have invested untold billions in a quest to understand natural groupings, or segmentations, of consumer populations, and to understand what consumers want. Most such activities are still performed using tools developed early in the age of mass media and advertising, which is to say during the period between 1920 and 1950. These tools include surveys, focus groups, data mining of consumer purchases, and the like. Social networks and similar virtual communities make it possible to engage consumers actively in answering timeless questions (“who are they?” and “what do they want?”). Today relatively little e-commerce leverages the extraordinary growth of the virtual community phenomenon described above, and partly this is because of its novelty. But also, businesses struggle because, while they can easily procure what they need from global networks of competing suppliers, they enjoy no such easy access to the highly fragmented—but also highly segmented—world of virtual communities of consumers.
Accordingly, it is an aim of the present invention to provide a system and a method for linking B2B eProcurement markets with processes for selling through virtual communities, for example by monetizing user-generated content that dominates these communities, and to provide vendors and advertisers a method to promote and sell products into and through virtual communities using marketing events and promotions, community-generated and user-generated content, and targeted advertisements.